Has America Become Less Poor?

In 2006, John Cassidy wrote in the magazine about the difficulties of measuring poverty. For years, the U.S. government didn’t try to calculate how many people were poor, Cassidy wrote. Then, in the nineteen-sixties, a government statistician named Mollie Orshansky came up with a way to determine what a family would need to not be impoverished. She based her calculations on the cost of food, which, at the time, made up a big proportion of household budgets.

To this day, the government uses a version of that approach to measure poverty, even as families’ budgets have transformed: food expenses make up a much smaller percentage, and low-income families benefit from new social services and tax benefits that the poverty measure also doesn’t account for. Starting in 2010, the government created a second way to calculate poverty that accounts for these factors—the supplemental poverty measure.

But that figure has been published only for the past couple of years, which means we haven’t been able to see how poverty has changed over time under the supplemental measure. According to the official measure, meanwhile, the proportion of poor people in the U.S. appears about the same as in the nineteen-sixties. It was fourteen per cent in 1967 and fifteen per cent in 2012. That has led to a lot of puzzlement over whether the War on Poverty of the sixties—which set in motion many of the anti-poverty programs that we rely on today—had any effect at all.

Now, a new study by a group of Columbia University researchers suggests what some policymakers have suspected for years: if you account for a fuller range of costs like clothing and shelter, and for government aid like food stamps, poverty has declined over the years—and by a lot. That is, even as people have limited wages and contend with high prices in the supermarket and elsewhere, the help from services like food stamps, and from tax benefits like the Earned Income Tax Credit, appears to have kept more people out of poverty.

The researchers used available information and estimates about people’s historical incomes, along with their access to various social services and their eligibility for tax credits, to come up with a measure of poverty since the sixties that resembles the supplemental poverty measure. Their finding: the proportion of poor people in the U.S. fell from twenty-six per cent in 1967 to sixteen per cent last year. (In this chart, “OPM” indicates the official poverty measurement, while “Anchored SPM” represents the researchers’ version of a supplemental measure, which is adjusted for inflation.)

Some politicians on the left might resist a measure that shows that poverty is much lower than it used to be: couldn’t this minimize the problem and make it harder to gain support for new anti-poverty programs? But it also may show that some anti-poverty programs of the past several decades appear to have achieved what they were meant for—which, one expects, should come as good news to everyone. Orshansky, the government statistician who came up with the first poverty measure, herself was open to other measurements. “If someone has a better approach, fine,” she said in 1999, according to Cassidy’s article. “I was working with what I had and with what I knew.”